Lawsuit halts DE's agreement with Walgreens

A compromise between Delaware Health and Social Services and Walgreens on medicaid reimbursement hinges on two trade associations dropping their lawsuits against the state. They’re not ready to do that just yet.

A compromise between Delaware Health and Social Services and Walgreens on Medicaid reimbursement hinges on two trade associations dropping their lawsuits against the state.

They’re not ready to do that just yet.

Today in federal court in Wilmington, the attorney representing the National Association of Chain Drugstores, and the National Community Pharmacists Association says they need more time to review the new terms.

Attorney Rick Ball argued in court today that the trade groups just received details of DHSS’s new medicaid reimbursement deal late Monday, and his clients are currently looking at the offer closely.

In an effort to save the state $500,000 Delaware’s Department of Health and Social Services announced in April it would reduce the reimbursement rate for brand name drugs by 2%. So, Walgreens said it would no longer fill medicaid prescriptions.

Hear what DHSS Secretary Landgraf has to say about medicaid pricing and national health care reform: [audio: /delaware/090812sawalgreens.mp3]

At that time 49% of medicaid clients in Delaware used Walgreens 62 pharmacies, still known as Happy Harry’s, to fill their prescriptions.

But this week Walgreens agreed to a compromise which reduces the reimbursement by 0.5%. It’s not as high as the original proposal but still saves the state $250,000.

To make up the difference there will be changes to the pricing and reimbursement of generic drugs as well so the state can still achieve a $500,000 savings.

The new structure would also apply to the other 104 pharmacies in Delaware that accept medicaid including ACME, Shop-Rite and Rite Aid.

Judge Sue Robinson asked both sides to get back to her within two weeks on whether the trade associations are satisfied with the new deal and will drop the case, or if she’ll need to hear arguments and make a decision.

DHSS hopes to have the new structure in place by September 15.